Billionaire's Divorce Ruling Sparks $700 Million Art Sale
(Bloomberg) -- New York developer Harry Macklowe and his estranged wife, Linda, were ordered by a divorce judge to split their $2 billion fortune, which means selling “an internationally renowned collection” of modern art from the likes of Pablo Picasso and Andy Warhol worth hundreds of millions of dollars.
New York State Supreme Court Justice Laura Drager in Manhattan ruled Thursday that the Macklowe art trove amassed during 59 years of marriage should be sold and the profits shared. In a sign of the acrimony that fueled a prolonged legal dispute, the couple couldn’t agree on what the collection was worth -- Harry’s expert said $788 million, while Linda’s said $625 million.
Among the collection are works by Willem De Kooning, Jeffrey Koons and a Giacometti sculpture titled “Le Nez," which one expert valued at $35 million and another estimated at $65 million. The Macklowes also own Warhol’s “Nine Marilyns” portrait of Marilyn Monroe valued at $50 million.
After a 14-week trial last year, Drager determined in a 65-page opinion how to split all the assets held by the 81-year-old developer and his wife, who is on the board of the Metropolitan Museum of Art. The New York Post reported the combined assets were valued at $2 billion.
Linda Macklowe will get to keep $40 million in art but will have to pay half of that to Harry, Drager said. She’ll get to keep their 14,000-square-foot apartment at the Plaza Hotel valued at $72 million, but have to pay her estranged spouse $36 million for his share. Harry will retain ownership of $82 million in commercial real estate -- including 737 Park Ave. -- but pay Linda $41 million.
The couple will split the $62 million they have in cash, the judge said.
The $23 million yacht “Unfurled” will go to Harry Macklowe, but the couple will share the $16 million in debt on the ship and he’ll have to pay his estranged wife the remaining equity, the judge said. Linda Macklowe gets to keep another $40 million of art -- including works by Koons and Picasso, but must pay Harry $20 million in credit, the judge said.
After a setback in the 1990s, where he had to turn over some of his business property to lenders, Macklowe had promised Linda he’d “never again” personally guarantee financing in his real estate business, according to Drager.
He rebuilt his business so that by 2007 he’d amassed a portfolio of real estate properties valued at $7 billion, including the GM Building at 767 Fifth Avenue that is home to the Apple store. But the judge found that Macklowe didn’t keep his promise because he personally guaranteed the financing for the purchase with short-term, one-year notes.
In about 2007, Macklowe claimed he’d transferred the art collection previously held jointly by the couple to his wife, to “protect” their personal assets, while Linda Macklowe argued the art was always held in her name, according to the judge’s ruling.
When the financial crisis hit in 2008, Macklowe had to sell his holdings, including the GM Building, for about $2.8 billion. While the couple avoided bankruptcy, Linda Macklowe said she was “distraught” her husband had violated his promise to never personally guarantee any loan tied to his business.
According to the New York Post, Linda, 80, filed for divorce from Harry in July 2016.
The couple were married Jan. 4, 1959, when he was a 21-year-old ad salesman for Parents Magazine and she was 20, working as a receptionist, the judge said. They had no prenuptial agreement.
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